About a decade ago, the City of San Antonio was all-in on trying to lure a Major League Soccer team to the Alamo City. And the city had a powerful ally in Spurs Sports and Entertainment (SSE), the parent company of the San Antonio Spurs.
They struck a deal that said if the Spurs’ company could not help bring an MLS team to town, the organization would owe the city and Bexar County $5 million.
Today, there is a pro soccer team in San Antonio, they play in a division one tier below Major League Soccer. But SSE never completed its $5 million to the city and county.
After years of letting it slide, San Antonio Mayor Gina Ortiz-Jones now wants the money in full.
Molly Smith, who covers city hall for the San Antonio Express-News, spoke to the Texas Standard about the disagreement. Listen to the interview in the player above or read the transcript below.
This transcript has been edited lightly for clarity:
Texas Standard: Let’s talk about this $5 million repayment. I don’t get it. Why does the Spurs owe the city $5 million? I know they’ve got this agreement, but what was that for?
Molly Smith: The agreement was called a reimbursement payment, and it was to pay back both the city and the county part of the public dollars that they used to purchase the stadium. It was to kind of minimize the risk to the deal if they weren’t able to secure this Major League Soccer team.
I see. So the Spurs, what, borrowed the money from the city, effectively? Is that what they kind of agreed to so that they could secure the rights to this stadium?
It’s actually a city and county-owned stadium, but the Spurs have a lease for the facility. They’ve been in this 20-year lease. They pay about a hundred thousand dollars a year to play out of this soccer stadium.
Okay, all right, and so under terms of this agreement, as both parties were looking to try to bring an MLS team to town, the Spurs said, we’ll pay you $5 million if we can’t get this done.
Exactly.
So how much have the Spurs paid to the city, if anything?
To date, they’ve repaid back to the city — the city/county corporation that owns the stadium — they’ve repaid $250,000, and that was in 2021. And since then, they’ve made no payments per the agreed-upon schedule of repayments when they entered into this lease back in 2015.
What was the agreed-upon schedule? Were they supposed to be paying in increments or paying one fell swoop or what?
Paying in increments between 2021 and 2028.
Well, so what’s the Spurs claim as to why they’ve only paid $250,000 so far?
So in late 2022, the Spurs came before Bexar County Commissioner’s Court and they asked to be free to that penalty. They wanted the penalty removed from the lease agreement.
And their argument was that they never had a chance to get an expansion team because, unbeknownst to them, the owner of the Columbus Crew, Anthony Precourt, had an existing deal with the league that would allow him to transfer the team to Austin. And in 2018, the city of Austin agreed for a deal that allowed for a private stadium to be built.
So in late 2017, the Spurs dropped their bid for an expansion team because they were under the understanding from the league that there could not be two teams in this corridor between Austin and San Antonio. So the organization has never really made a bid for the MLS team in the meantime.
So the Spurs would like to get this dismissed completely. They want to be off the hook for $5 million.
Obviously, the Spurs are big players in San Antonio politics and culture. Is it fair to say that Mayor Ortiz-Jones appears to have shown a willingness to push back against the Spurs that others have been reluctant to do?
Yes, and she’s garnered a lot of criticism from that, but also praise. She took office in June and she’d been very skeptical of this separate deal that was worked out this past summer between, again, the city, county and Spurs to build the Spurs organization a new arena.
And she’s been very kind of critical of these public investments of dollars into sports facilities. She’s questioned the economic impact. She’s also been critical of previous deals and even the deal that the city council over her objections approved, because she said there aren’t enough benefits for these public entities. They’re not getting enough.
So some folks have really praised that and said she’s really one of the first, I think, leaders in the city to kind of push back. And then there’s a lot of other folks who will say she is going to push the Spurs away. And by antagonizing them and asking them for all this stuff, they’re going to move to another city.
Has that been talked about? Has that been in the air?
You know, I think when the city and county over the past two years were working out this deal for that basketball arena, there was this fear. And the Spurs never addressed it.
But I think it was a silent threat that they were able to use, this fear that they never said yes or no to, that kind of prompted many, many elected officials to approve the deal. So I think there’s a big fear amongst residents that San Antonio would really lose out if the Spurs were to leave.
What about Major League Soccer? Any hope for MLS coming to San Antonio or has that ship completely sailed?
I think many in San Antonio would say that they would kind of fault Austin and say because of this Austin team… Or fault the owner, you know, because of this team, San Antonio will never have a chance.
I think that’s debatable, but I think what’s really hindering San Antonio rather than the existence of Austin’s team is that our soccer stadium is not big enough for Major League Soccer standards. Our stadium is less than 10,000 seats. The league wants stadiums of at least 20,000.
San Antonio is also a fairly poor metro area, so there’s not going to be, I think, as much spending around the team that owners would like.
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